Mortgages Blog

The happy side of bad job numbers

The January employment report released today was disappointing and confusing, at best. But it should keep mortgage borrowers happy.

The economy added only 113,000 jobs in January, according to the Labor Department. That's less than the 185,000 that economists expected to see, but more than the mere 75,000 added in December. The unemployment rate dipped again, to 6.6 percent, the lowest level since October 2008.

An expected bummer

"This was a disappointing, but at the same time not surprising, report," says Joel Naroff, president and chief economist of Naroff Economic Advisors. "There was simply no way to know how the winter has affected hiring, and given what has been going on in February, we may not have any good idea of the trend in the economy for a couple more months."

Let the good times roll

For mortgage borrowers, this could mean rates might stay low for a while as investors try to get a clearer picture of how the economy is doing. The Fed may also take a wait-and-see approach.

"That is likely the strategy the Fed will take," Naroff says. "Indeed, given that the unemployment rate is almost at the FOMC's guidepost 6.5 percent rate, the members will have to cool their heels before deciding what is going on and how they should react."

Rates have fallen for five weeks in a row, according to Bankrate's weekly survey. This jobs report may not push rates much lower, but it should at least keep them from rising for now.

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